Toshiba shareholders choose to oust chairman after government collusion revelations

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Former Toshiba Chairman Osamu Nagayama.

Image: Getty Images

Toshiba chairman Osamu Nagayama was ousted by shareholders at the company’s annual general meeting.

Another director who was on Toshiba’s audit committee, Nobuyuki Kobayashi, was also ousted in the shareholder vote.

The annual general meeting held on Friday marked the first meeting of Toshiba shareholders since an independent investigation [PDF], adopted by shareholders, revealed that the company had colluded with Japanese officials to prevent some shareholders from voting at the annual general meeting last year.

The investigation, conducted by three lawyers, found that Toshiba “had worked out a plan” with officials from the Ministry of Economy, Trade and Industry to prevent Effissimo Capital Management, which owns 9.9% of the shares. of Toshiba, to exercise certain shareholder proposals at Toshiba Annual General Meetings.

“Toshiba’s actions have directly or indirectly had undue influence on shareholders with the intention of effectively interfering with the exercise of shareholders’ rights at this AGM. Therefore, we believe that this AGM was not managed fairly, ”the investigation report said.

Earlier this week, Nagayama wrote an open letter expressing his “deep regret” about Toshiba’s conduct and pledged to be an agent of positive change.

“I would like to express my deep regret about the recent unacceptable events in the company which have eroded your confidence in us,” Nagayama wrote in the letter.

“I promise you that I will continue to be an agent of positive change, not a protector of the status quo.”

Toshiba shareholders were not convinced by Nagayama’s pledge on Friday, however, with the majority of them voting in favor of Nagayama’s resignation as chairman.

The shareholders also voted for nine other candidates for the board of directors, these nine being allowed to retain their places on the board of directors.

The vote counts for each candidate for the board of directors were not disclosed, with Toshiba only revealing the results of the vote.

With the ousting of two board members on Friday, Toshiba said details of the director and officer changes, including the makeup of each committee, would be worked out based on the results of the resolution at the time of the meeting. a future board meeting.

“The company recognizes the seriousness of the rejection of some director nominees,” Toshiba added.

On the same day as the annual general meeting, Toshiba also announced that it achieved operating profit of 104 billion yen for the fiscal year ended March 2021, down 26 billion yen from the previous year. .

During the year, Toshiba also saw its number of employees decrease from more than 8,000 to 117,300.

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